M/S Pramod Khad Bhandar vs. The Union Of INDIA Through The Secretary, Ministry Of Finance

Facts

The petitioner, a taxpayer, filed a writ petition before the Patna High Court challenging an order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle. The petitioner also sought de-attachment of their bank accounts, which had been attached post the impugned order. The Revenue contended that the petitioner had an alternative efficacious remedy of filing an appeal under the Bihar Goods and Services Tax Act, 2017. The petitioner confined their relief to specific prayer clauses, reserving liberty to pursue others. The Court noted that the impugned order was passed ex parte and without sufficient reasons, violating principles of natural justice.

Held

The Court held that the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, under Section 73 of the State Act, was bad in law. The Court found that the order was passed in violation of the principles of natural justice, specifically by not affording a fair opportunity of hearing to the petitioner and by not providing sufficient reasons for determining the amount due. The Court quashed and set aside the impugned order. The Court also directed the de-freezing/de-attaching of the petitioner's bank accounts. The petitioner was directed to deposit an additional ten percent of the demand raised within four weeks, without prejudice to their rights. The Assessing Officer was directed to afford adequate opportunity to all concerned, including the petitioner, and pass a fresh order on merits expeditiously, preferably within two months of the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open. Liberty was reserved for the petitioner to challenge the fresh order and for parties to take recourse to other available remedies.

Key Issues

1. Whether the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, under Section 73 of the State Act, is bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient reasons for determining the amount due? Petitioner's Arguments: The petitioner argued that the order was passed ex parte, without affording sufficient time for representation, and lacked decipherable reasons for the demand, thus violating principles of natural justice. The petitioner also highlighted the attachment of bank accounts as a consequence of this order. Revenue's Arguments: The Revenue contended that the petitioner possessed an equally alternative efficacious remedy of filing an appeal under the provisions of the Bihar Goods and Services Tax Act, 2017.